The Win 7 Disk Manager is somewhat limited. It can handle some partitioning chores, changes physically behind the OS partition, i.e. making the OS partition smaller from the end of the partition, etc. If you wish to do some partitioning work ahead og the OS partition you are out of luck with Win 7 Disk Manager.

Win 7 could probably handle this chore, but if I had 2 partitions and wanted to make C bigger by making D smaller, Win 7 Disk Manager cannot do this, whereas Partition Wizard can. This change involves moving data in the D partition backward in the smaller partition and this must be done outside Windows. The 3rd party apps can.

As Ted suggests, there are a few function which the Windows 7 manager is incapable. When the need arises a free third party tool would be needed.
If you don't manipulate your partitions too often the third party tool can be then uninstalled after.

DRIVE IMAGINGInvest a little time and energy in a well thought out BACKUP regimen and you will have minimal down time, and headache.

Thanks Ted and CLiNT, the next question is (which I think I've seen somewhere but can't find it), is it better to have two partitions, one for OS and one for data? If so, how big should th OS one be? I have a 1Tb disk.

You will find advocates on both sides. Either one will work. I like one partition for simplicity. Ted likes two so he can restore the OS without affecting data (which should be backed up in any event) As long as you don't have to restore your OS very often, the partition question is moot. Pick an option and don't lose any sleep over it.

Its much more important to have a good data backup regimen at a minimum or preferably a disk image of the os and data partitions backup schedule.

I would prefer to have no partitions if possible, but a few extra internal drives with the OS being installed on the fastest one.
Like an SSD or a 10K mech with 100-300 GB exclusively dedicated to the OS. Dedicate all your storage & image needs to 1 or 2TB drives.
If all you have is a single 1TB drive to work with then a partition or two would be prudent in your instance.
...But be weary of relying 100% on it for backup.

DRIVE IMAGINGInvest a little time and energy in a well thought out BACKUP regimen and you will have minimal down time, and headache.

The biggest reason I like 2 partitions, one for my OS and one for my Data is simple, the data sits there untouched by everything except a full HD failure.

As Jerry mentions, I believe the data, which I also back up separately from my Image, is safer on the second partition (or HD). I can restore the OS without affecting my data at all. My Images are all less than 1 month old, but for many people data changes a lot in one month. If I restore my OS, my data is still up to date. If however I had just one partition, once I restored my OS, I would then have to go through and restore my latest data backup as well. That's one extra step I do not have to go through.

Another instance that having a separate data partition will save me is when I install Win 8 Pro in a few weeks. My data will still be there. All I will have to do is change where things point in Win 8 and I'm back in business. This may not be a big deal for those that upgrade to Win 8, but I am also a firm believer in Custom (Clean) installs. I guess you just can't teach an old dog new tricks.

In my present situation I have both Win 7 and Win 8 dual booted. Both OS's point to the same data on the data partition. I do not have to try to sync the data between the 2 OS's because they use the same data.

As Jerry and others have mentioned, this is a personal choice. There are advocates from both sides, and they are all right. Choose what works for you. I believe more important than how to set up your PC is to take the steps to back everything up. Imaging is great for whole HD's, but is generally not sufficient for your data.

note: I always say partitions because my main PC is a laptop with only one HD. For a desktop PC I suppose you could say HD rather than partition (as in Clint's example) Having separate HD's is similar to separate partitions except that you don't need to use S/W to set up separate HD's. They are already separate. The principle is the same though. You can have your OS on one HD (with all apps) and use a second HD for the data drive.

I also store my Images on an Ext. USB HD not on a separate partition. In Clint's case he is using a separate Int. HD to store Images. I could also set up a separate partition for that, but it's dangerous to do so because if your HD fails, you loose you Images as well. If they are separate HD's it not nearly as dangerous because there is minimal chance of loosing all HD's together (Fire, tornado or such)

One of the reasons I asked is that there does seem to be differing opinions about what's best. I backup continuously to a networked attached drive (Seagate/Memeo) and use Macrium Reflect to image once a week, so I have two backups (albeit on the same 2TB disk). I also backup my wife's laptop similarly. I have an XP desktop - that just has the memeo backup, if the HD fails then it's a new PC (that's my excuse) but the data is backed up. I now have some reasoned explanations of both ways and will consider them carefully. Thanks for all your comments.

As stated, this is probably more personal preference. Both systems will work nicely. It is probably difficult to decide. My method takes a little more to set-up, where as it is quicker when disaster strikes (IMO). The single partition method is a little easier to set up, but takes more steps when disaster strikes.

I guess you have to ask yourself, how often might I need to restore an Image???